deed of trust - how to split or input into property?

monkey_writer · 9 May 2006 at 10:54AM

Hello,

I am buying a property with my partner. She is putting in a bigger deposit and will be paying 70% of the mortgage. She works full time, I work part time.

We are drawing up a deed of trust that will set out that any monies each of us put into the property will be marked down and will be added onto each of our shares in the property - so that if anything goes wrong we can work out or percentage shares and divide the profit (or loss!).

My partner has been very firm that every penny she puts into the property will be accounted for in her share of the property.

However, the property needs a lot of work and as I am part time and have some experience with DIY, I am going to be doing the bulk of the work.

So while she's at work earning money which increases her stake in the property, I will be at home working on the property - which will increase the value of the property - but as I'm not putting in money this work will not be reflected in my share of the property.

Has anyone else dealt with this issue? Does anyone have any idea how I can fight my corner in this?

Thanks!

Red_Elle · 9 May 2006 at 10:59AM

As long as you can prove that you have done the majority of the work then if worse came to worse you would be able to make a valid claim that you are entitled to more money. We have just had a declaration of trust drawn up and the family home is a very tricky aspect of family law, as it can depend upon so much. It is less complicated when children are not involved, but nothing appears to be cut and dried. I would keep receipts for everything you buy to do in the house.

JennyW_2 · 9 May 2006 at 11:16AM

My partner has been very firm that every penny she puts into the property will be accounted for in her share of the property.

However, the property needs a lot of work and as I am part time and have some experience with DIY, I am going to be doing the bulk of the work.

So while she's at work earning money which increases her stake in the property, I will be at home working on the property - which will increase the value of the property - but as I'm not putting in money this work will not be reflected in my share of the property.

I don't mean to sound rude, but this has quite a "negative" feel about it already and you haven't even purchased yet. My husband pays the mortgage on our property and I put in the deposit from the sale of my previouse house. We don't have any such deed drawn up, as far as we are both concerned, it's a shared effort.

Does anyone have any idea how I can fight my corner in this?

just concerned you feel you're fighting already?

silvercar · 9 May 2006 at 11:17AM

you could get a valuation of the property now and an estimate of its value with the work done to upgrade it. If you are then doing all the upgrading that increase belongs to you.

Say you buy for £150k, your partner puts in £30k more than you in deposit but your work on the property should increase the value of the property by £25k. so one of you has contributed 30/175 and the other 25/175. then say all the household bills and the mortgage are going to be split 60:40. So of the remaining 120 (=175-30-25) your partner will be paying for 72 and you 48. All together your partner is paying 102/175 and you 73/175.

If you want to complicate things further you could separate utilities (split in the ratios) from households bills (split equally).

The other way is to divide the current ownership as I suggested and then split the property growth (or loss) equally, as without each other you wouldn't be purchasing this property.

monkey_writer · 9 May 2006 at 11:39AM

Thanks for your help everyone.

JennyW - well I wouldn't call it fighting ;-) but the girlf's parents have put the fear of god into her and she had a difficult breakup in the past. Personally, I would just leave it be as chances are we'll do up the house together in our various ways and live in it for 10 years then move somewhere else still together... but now she's covering herself so thoroughly I feel I really ought to cover myself as well...

Jay1b · 9 May 2006 at 1:10PM

Have you tried explaining this to her? Alternatively agree to it, on the condition that she 'pays' you for carrying out the work as and when your doing it. So 300 hours spent = £4500 etc.... do this in cash outside of the agreement for easiness.

However i think you need to look at it this way (or she does). If her deposit is say 30%, then when you sell the house, she takes 30% - everything after that is split 50/50. So basically any monies earned since moving in is 50/50.

monkey_writer · 10 May 2006 at 12:13AM

it feels like however we do it - it's going to be complicated...

She has higher deposit, is paying 70% mortgage and will probably pay more into the decoration/DIY pot.

I am paying a smaller deposit, 30% mortgage and will be doing far more of the physical work on the property.

We are going to split all utilities / household bills equally.

never_enough · 10 May 2006 at 12:42AM

Potentally a minefield, but maybe the easiest thing is to just sit down & talk it over with her. If you do break up it's going to be messy & probably nasty whatever you write now. Make sure you're totally happy before you sign any deed, it's a joint purchase.
Of course if the value of the house goes up, due to your diy, then your share is worth more too.
If you're going 30%/70% then that should include decorating bits & pieces too(not bills of course....but she may expect you to pay more as you're there more than she is...;) ) It just sounds as if it's all very awkward.
Good luck!

david29dpo · 10 May 2006 at 5:54AM

have you checked labour costs these days? sounds like your getting a poor deal.

JennyW_2 · 10 May 2006 at 7:41AM

where do you drawn the line? If absolutely everything's going to be split/apportioned it's going to be a nightmare and as never enough said, "potentially a minefield".

My first marriage and house purchase was just like this - do you know how shameful if feels to give your husband half the money towards the weekly shop when you get home?? :eek: Everything purchased was split (this was his idea) and of course the marriage failed and it turned out very messy and nasty. All I got back was my deposit for the property - there wasn't a hope in hell I was going to get anymore, no matter what I had contributed to decorating the house, tarting up the garden etc.

To me, it reads as if you'll be her decorater/builder and she'll let you stay in "her house" for free.

I wish you luck.

Red_Elle · 10 May 2006 at 8:34AM

In an ideal world there would not need things such as declarations of trust. Now I don't know the exact figures here, but a large proportion of marriages end in divorce and it is a lot more complicated to sort out when you are going through a divorce than it is to sort out beforehand.

What is wrong with people wanting to be financially independent? I can see why the OP's gf wants to get something in writing. You can WANT to be in a relationship forever, but sometimes circumstances change through no fault of the people involved. Just because you get something drawn up beforehand does not mean that you're not committed. It means that you are sensible.

Insuring your car does not mean that you WANT your car to break down, it means that you have prepared for any eventuality, because it would be a hell of a lot more complicated if you crashed and were not insured. Before people tell me the obvious in that a car is not like a marriage, that was an example only, not a comparison.

deed of trust - how to split or input into property?

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